A wireless portable communications device such as a mobile phone is equipped to transmit and receive data or voice via a cellular network and can also be equipped to exchange digitized data, which can represent speech or voice, via a short range radio link.
Various proposals for using mobile phones, RF equipped personal digital assistants (PDAs), or any other portable RF equipped communication device for that matter, as means to conduct financial transactions are being developed.
The basic idea is that a portable wireless communication device can communicate an electronic token representative of monetary value to another device suited to receive such an electronic token. The portable wireless communication device may be a mobile phone equipped with suitable security devices and software, and it communicates with a device, which may be a Point-of-Sale (POS) terminal or kiosk equipped with a short-range radio interface unit.
In particular, when a POS device attempts to communicate with a portable wireless communication device belonging to a customer standing in line, for instance, it is a useful security check for the portable wireless communication device to be able to verify that the signal it is receiving is from a nearby source, i.e. the POS device, and not from a more remote and perhaps fraudulent source.
What is needed is a system and method for verifying the proximity of a portable wireless communication device to a POS device. By ensuring that the two devices are within a certain proximity, it reduces the possibility of a fraudulent transaction occurring.